Microsoft to appeal $106 million VirnetX patent verdict

VirnetX has won the first round in its patent-infringement case against …

VirnetX, a software corporation founded in 2005, has prevailed in a patent-infringement lawsuit accusing Microsoft of willfully infringing on two patents for automatic and secure Virtual Private Network (VPN) technology. The Texas jury recommended an award of $105.75 million, which is less than half of the $242 million that VirtnetX asked for. Still, the verdict was a very positive one for VirtnetX. "Our clients are very happy with today's verdict," said VirnetX counsel Douglas Cawley in a statement. "We hope this decision sends a clear message to patent infringers everywhere that they will be held responsible for wrongly profiting off the hard work of others."

Microsoft is not happy with the decision and plans to fight on. "We are disappointed by the jury's verdict," a Microsoft spokesperson told Ars. "We respect others' intellectual property, and we believe the evidence demonstrated that we do not infringe and the patents are invalid. We believe the award of damages is legally and factually unsupported, so we will ask the court to overturn the verdict."

The case was tried in the US District Court for the Eastern District of Texas, the favored venue for patent infringement cases.

In its original lawsuit filed in February 2007, VirnetX alleged that Microsoft Office Communicator included technology covered by its patent No. 6,502,135 and that Windows Meeting Space infringed its patent No. 7,188,180. The $105.75 million breaks down as $71.75 million for the former and $34 million for the latter, according to the Scotts Valley, California company. VirnetX acquired the rights to the patents from the government-contracting company Science Applications International in 2006. Microsoft accused VirnetX of being a patent troll during the trial, and it was revealed that the company's business model was based on winning the lawsuit, though it does have a licensing agreement with VeriSign.